Religious Workers: Federal Lawsuit Challenges CIS Policy Requiring Non-Profit Organizations To Be Tax-Exempt As A "Church" Or A "Religious Organization"
In February, 2005, a lawsuit was filed in U.S. District Court for the District of Columbia, challenging the policy of United States Citizenship and Immigration Services (CIS) of requiring non-profit organizations affiliated with a religious denomination to be recognized by the Internal Revenue Service (IRS) as 501(c)(3) tax-exempt “churches” or “religious organizations” in order to petition for religious workers.
The INA statute and regulations provide for two intended sponsors of religious workers: the "bona fide nonprofit religious organization" and the "bona fide organization which is affiliated with the religious denomination and is exempt from taxation as an organization described in section 501(c)(3) of the Internal Revenue Code." 8 USC 1101(a)(27)(C)(ii)(III); 8 USC 1101(a)(15)(R)(ii); 8 CFR § 204.5(m)(2); 8 CFR 214.2(r)(2).
The CIS policy is being challenged on grounds that it fails to recognize, and deletes from the statute, the "affiliated organization" by blurring the statutory distinction between bona fide "religious organization" and bona fide "affiliated organization." By collapsing both under the generic heading "religious organization," CIS requires the affiliated organization to be tax-exempt as a "religious organization" or "church".
The lawsuit, Arden Wood et al v. USCIS et al (No. 05-cv-363), was filed by Lataif & Associates, P.A. on behalf of Arden Wood, Inc. and Tenacre Foundation, both Christian Science nursing facilities, and by the Association of Organizations for Christian Science Nursing (AOCSN) on behalf of its 32 member nursing facilities. The named Defendants are CIS, CIS Administrative Appeals Office (AAO), Department of Homeland Security, and Department of Justice.
On June 6, 2005, a hearing was held before U.S. District Judge Paul L. Friedman on Plaintiffs' Motion for Preliminary Injunction. At the conclusion of the hearing, Judge Friedman found that Plaintiffs had established a substantial likelihood of success on the merits. Regarding the CIS policy of requiring a religiously affiliated organization to be a "church" or a "religious organization", Judge Freidman found:
First, on the issue of likelihood of success on the merits, I think that there is a substantial likelihood that the plaintiff will be able to persuade me that they, and not the government, is reading the statute correctly. 8 USC 1101(a)(27)(C)(ii)(III). And that the regulation is inconsistent with the statute, and therefore is wrong.
Despite 22 affidavits from various Plaintiff facilities, Judge Friedman found insufficient evidence of irreparable injury and denied the preliminary injunction.  Plaintiffs filed an interlocutory appeal to the U.S. Court of Appeals for the D.C. Circuit (No. 05-5268), where the case is now pending.
The case arose out of the denial of two I-360 religious worker petitions filed by Arden Wood in July 2002, seeking special immigrant status on behalf of two of its full time, foreign national Christian Science nurse employees. At the time of filing, both nurses had been continuously employed with Arden Wood in R-1 nonimmigrant status since March 2000.
In its I-360 petitions, Arden Wood presented evidence that it is affiliated (closely associated) with the Christian Science religion and that it possesses 501(c)(3) status. In May 2003, CIS' California Service Center issued identical denials of both petitions. Citing to 8 C.F.R. 204.5(m)(2-3), CIS held that Arden Wood must be 501(c)(3) tax-exempt as a “church” or a “religious organization.”  The AAO subsequently affirmed the CIS Service Center denials. Based on the AAO denials (which both parties agree are binding on all Service Center adjudications) Plaintiffs filed a complaint in federal court seeking declaratory and injunctive relief. Plaintiffs allege that the plain language of the INA statute, 8 USC 1101(a)(27)(C)(ii)(III), requires neither tax-exemption as a “church” nor tax-exemption as a “religious organization.” Plaintiffs rely in part on Camphill Soltane v. Dept. of Justice; INS, 381 F.3d 143 (3rd Cir. 2004), wherein the legacy INS conceded that tax-exemption as a “church” is not a requirement under 8 CFR 204.5(m) in order for non-profit organizations to sponsor religious workers.
Plaintiffs maintain that to qualify as an employer sponsor under the INA, a nonprofit organization affiliated with a religious denomination need only demonstrate tax-exemption under 501(c)(3) generally. The type of 501(c)(3)  organization is irrelevant under the statute. Plaintiffs maintain that CIS is unlawfully rewriting the statute and misinterpreting the regulations in a deliberate attempt to deny Plaintiffs usage of the R-1 and special immigrant religious worker visa classifications. Plaintiffs contend that the statute and regulations contemplate a broad variety of non-profit organizations as sponsors of religious workers, not simply those tax-exempt as churches or religious organizations. Defendants’ policy has effectively eradicated an entire class of sponsors provided for in the statute, namely the “affiliated organization,” by adding an additional eligibility requirement not in the statute: namely 501(c)(3) tax-exemption either "as a church" or "as a religious organization."
In its pleadings, CIS has characterized the issue as one of “documentation necessary under the regulations” to establish a petitioner’s eligibility – eligibility which requires tax-exemption as either a “church” or “religious organization.” CIS (and AAO) insist on either (1) an IRS letter evidencing tax-exemption “pursuant to 170(b)(1)(A)(i) of the Internal Revenue Code” or (2) “to meet the requirements of the regulations, documentation includes, at a minimum, a completed IRS Form 1023, the Schedule A supplement, which applies to churches, and a copy of the organizing instrument of the church[.]” CIS admits that Arden Wood’s petitions were denied because the “Internal Revenue ruling provided to the Service Center only referred to Arden Wood’s status as a non-profit and not as a religious organization.”
While defending its actions, CIS has not admitted that its actions in fact constitute a policy. Plaintiffs argue that the government cannot deny its policy, particularly in light of 49 AAO decisions since 1995 requiring evidence of tax-exemption "as a church" or "as a religious organization." Available in WESTLAW, FIM-AAU Database (term search: "170(b)(1)(A)(i)").
In an apparent effort to avoid legal consequences from openly acknowledging this policy, CIS has issued various memoranda attempting to justify its position. In the Yates Memo , Extension of the Special Immigrant Religious Worker Program and Clarification of Tax Exempt Status Requirements for Religious Organizations (Dec. 17, 2003), CIS states:
Qualifying as a religious organization 'church' under section 170(b)(1)(A)(i) of the IRC is only one method of determining if the petitioner is a qualifying organization. Other organizations classified under section 170(b)(1)(A) of the IRC may qualify if it can be established that this classification is due to religious factors and that they are organized for religious purposes and operate under the principles of a particular faith, rather than solely for education, charitable, scientific and other 501(c)(3) qualifying purposes.
See also, Kleczek Letter , CIS Office of the Chief Counsel, Re: Religious Organizations (March 9, 2004)(same).
In "The Religious Worker Visa Program: Only 'Churches'", Immigration Law Today, May/June 2004 at 28, author Melanie Nezer states: "this author heard firsthand from the California Service Center (CSC) during an AILA Liaison Meeting on January 28, 2004, that only organizations whose 'primary purpose' is religious could petition for a religious worker." This observation confirms the CIS policy of holding that schools, hospitals, and similar facilities with a religious affiliation do not have religion as their primary purpose and are, therefore, ineligible for religious worker benefits.
CIS has also made legal concessions in federal court. See, Appellee's Letter to Court, Camphill (No.03-1626)(Dec. 3, 2003)("the agency is in the process of issuing a memorandum that … broadens its interpretation of when an organization may qualify as a 'bona fide religious organization'; qualifying as a religious organization 'church' under 170(b)(1)(A)(i) of the Internal Revenue Code is no longer the only method of determining if the petitioner is a qualifying organization …In light of this change to the agency's interpretation of its regulation, CIS is withdrawing the argument … that Camphill Soltane had not qualified for the special immigration visa because it does not qualify as a 'church.'); Camphill 381 F.3d 143, 148-149 (3rd Cir. 2004) (accepting CIS' withdrawal and proceeding under the assumption that Camphill, a nonprofit religiously "affiliated organization," qualifies as a "religious organization."). Even lawyers writing on this issue are being misled into believing that CIS has abandoned this policy.
Unfortunately, following the Third Circuit's acceptance of CIS' concession, CIS again began applying the very policy which it disavowed in Camphill. This is evidenced in at least 15 AAO decisions issued after Camphill. See e.g., Matter of [name not provided], 2005 WL 2159750 (AAO Jan. 4, 2005)("According to documentation from the IRS, the petitioner's tax-exempt status derives from classification not under section 170(b)(1)(A)(i) of the IRC of 1986 (the Code), which pertains to churches, but rather under section 170(b)(1)(A)(vi) of the Code. The director denied the petition, stating 'this section is not the one relating to religious organizations …Therefore, the petitioner is not tax-exempt as a religious organization and is ineligible for special immigrant classification on any alien employees.'"). Matter of [name not provided], 2005 WL 2159746 (AAO Jan. 4, 2005)("The director determined that the petitioner had not established it was a bona fide religious organization pursuant to 8 CFR 204.5(m)(3)(i) in that it had failed to establish it held tax-exemption under section 170(b)(1)(A)(i) of the IRC.").
As reflected in the 49 AAO decisions, this CIS policy is impacting virtually all religions (including Christianity, Judaism; Islam; Hinduism; and Buddhism) and denominations (including Catholic, Protestant, Seventh Day Adventist, and Evangelical). This policy is also being applied to a wide variety of nonprofits, including missionary organizations; homeless shelters run by Catholic Archdioceses; television broadcasting organizations; parochial schools and universities; spiritual institutions; community charitable organizations; and seminaries.
While, thus far, all of these AAO decisions have involved I-360 special immigrant petitions, the CIS policy underlying them would make every R-1 nonimmigrant petitioner ineligible on exactly the same grounds. Without judicial intervention, it appears it is only a matter of time before CIS extends this policy to deny or revoke all R-1 petitions, with the massive disruption which it would cause among affected non-profits.
The U.S. Court of Appeals for the D.C. Circuit has issued a briefing schedule for Plaintiffs’ interlocutory appeal, which calls for briefing to be completed by December 27, 2005. Oral argument will likely be scheduled in January or February of 2006.
2 Under the Internal Revenue Code, the term “Church” is generally defined as a “place of worship” including, for example, mosques and synagogues. In contrast, the term “religious organizations” does not refer to “churches” or integrated auxiliaries, but rather refers to entities whose “principal purpose is the study or advancement of religion.”
3 Organizations organized and operated exclusively for charitable, religious, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children and animals, are eligible to obtain recognition of exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code.
4 CIS Memorandum, Extension of the Special Immigrant Religious Worker Program and Clarification of Tax Exempt Status Requirements for Religious Organizations," William Yates, Assoc. Dir. Of Operations (HQ 70/8), posted on AILA InfoNet at Doc. No. 04011211 (Jan. 12, 2004)
6 For example, one article has asserted, without citing any authority, that if a case has been denied by the AAO solely because the petitioner was not a "church", a Motion to Reopen should be filed. Rodney M. Barker and Lia Suntoso, "Permanent Religious Workers under the Immigration and Nationality Act", AILA Occupational Handbook: Immigration Options for Religious Workers (2005 ed.).
Lawrence Lataif and Karen Holland practice law with Lataif & Associates P.A., in Fort Lauderdale, Florida. They can be contacted by calling to (954)776-5777, fax (954) 776-2050, or email to Lataif@AOL.com
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